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Amazon India gets $3bn extra investment ahead of Alibaba arrival

Amazon is gong to spend even more money on growing its business in India, the company’s CEO Jeff Bezos has announced. That’s no surprise given that India is its fastest growth market.

The e-tail giant is already spending $2bn there but will add a further $3bn which is some hefty increase. The company currently employs 45,000 people in India and isn’t alone in seeing the huge potential there.

Only last week Macy’s said India is one of its fastest growing regions and is as important as China to the company.

A few days earlier, a report by Google and AT kearney suggested that the Indian e-commerce market could reach $60bn by 2020.

Such growth means Amazon doesn’t have the field to itself, of course, with home grown player like Flipkart and Snapdeal very strong there. And powerful rivals like Alibaba are getting ready for an Indian assault. Alibaba is currently building its team for a 2016 launch.

Indian suppliers are already the biggest single group outside of China to be available on Alibaba internationally.

Another issue to take into account is that as the Indian sector gets more competitive, not everyone will benefit. Only today a company described as “India’s equivalent to Boohoo.com”, Koovs, saw its shares falling as it announced a fundraising at a steep discount to its last closing share price. The company’s sales have soared to £10m but its operating losses were three times that!

Will the arrival of Alibaba and Amazon’s expansion spell good news or bad for firms like Koovs? Only time will tell.